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Symbiotic relationship: the Orbán government and Lajos Simicska’s Közgép

I think that it is something of an indictment of the Hungarian opposition’s political acumen that the Nyerges-Simicska business empire’s intimate ties to the Orbán government only recently became widely known. It shows how slowly MSZP politicians react to opportunities that can be described as unintended gifts of the ruling governing party, Fidesz.

Viktor Orbán in 2002, shortly after the lost elections, bemoaned his foolish failure to build an economic empire around his party that would supply him with ample money to conduct effective political campaigns. This piece of information was available already in 2002, and the two governing parties, MSZP and SZDSZ, should have tracked Fidesz’s efforts to gather a powerful business group that would serve Viktor Orbán’s political goals.

Of course, it is possible that MSZP’s financial wizard, László Puch, had no intention of revealing the financial wrong-doings of Fidesz because the socialists were just as guilty of illicit financial machinations as Viktor Orbán’s team.

In any case, although it came to light only recently that Lajos Simicska, an old friend and confidant of Viktor Orbán, was actually the majority owner of Közgép, a company that seems to win a disproportionate number of government and municipal orders for large construction projects, a lot of details about the Nyerges-Simicska empire were available much earlier. I wrote once about the relationship between the Ministry of National Development under Tamás Fellegi and the business circle of Zsolt Nyerges and Lajos Simicska. That was in late 2011, but reporters began investigating this business duo and their friends already in 2010.

I found the first news items about the relationship between Fellegi, Nyerges, and Simicska during the early summer of 2010. Even in hindsight the description of the setup was pretty accurate. Fellegi, who was a business partner of both Zsolt Nyerges and Lajos Simicska, was placed at the head of the ministry responsible for the dispersion of subsidies received from the European Union.

For a few days after Figyelő wrote a long detailed article on the Nyerges-Simicska connection and even mentioned the “mysterious Közgép” a few articles appeared on the topic. Mostly summaries of the original article. No investigative journalists set out to uncover further details of the close connection between Fellegi, the new minister, and his former business partners although clearly this connection was of the utmost importance in finding out in whose hands the subsidies from Brussels end up. Yet the topic was dropped.

It took journalists another year to revisit the story. The occasion was the resignation of Tamás Fellegi from his post as head of the Ministry of National Development. Wild theories were put forward about the reasons for and the significance of this resignation. One bizarre theory was that animosity had developed between Fellegi and Simicska which ended with the defeat of Fellegi. Another was even more fanciful. According to this version, Viktor Orbán was helpless in checking the activities of the Ministry of National Development that served the interests of Simicska against the wishes of the prime minister. According to this scenario, Orbán’s only reliable ally in the economic sphere was György Matolcsy. Now, with Fellegi’s resignation at least Orbán had the opportunity to handpick someone who would be loyal to him.

Anyone who is even the slightest bit familiar with Viktor Orbán’s personality and his leadership style should immediately know that the above scenario is total nonsense. After all, if Orbán didn’t like the way Fellegi handled the “oligarchs” he could have sent him packing. But instead he named an unknown woman with only a high school education to replace Fellegi. Mrs. László Németh is considered to be a pawn in the hands of the “oligarchs.” The new minister immediately hired Attila Nyerges, brother of Zsolt, to be her chief adviser. I might add here that Attila Nyerges is a veterinarian, so I don’t think that his advice has much to do with his original profession.

It would be nice to know the real reasons behind Tamás Fellegi’s resignation but unfortunately we can only guess. Perhaps Fellegi became tired of serving the demands of a few powerful businessmen. It is also possible that Viktor Orbán wasn’t entirely satisfied with Fellegi’s attitude toward the Nyerges-Simicska business group. The third possibility is that his negotiations with Russia and China were not as successful as Viktor Orbán had hoped. In any case, today the Ministry of National Development has closer ties with the Simicska group and Közgép than ever before.

Although the Orbán government doesn’t hide its intentions about enriching “Hungarian capitalists,” the perhaps far too aggressive practices of Közgép may backfire. The Democratic Coalition (Demokratikus Koalíció) already asked Brussels to investigate, and at the very least the Orbán government’s brazen discrimination in favor of Hungarian businesses might run afoul of EU rules.

In addition, the domestic reaction to the indecent enrichment of certain friends of Viktor Orbán and Fidesz might also cause trouble for the governing party. A few days ago opposition LMP MPs and activists chained themselves to each other and sat down just inside of the main gate of Közgép. Eventually the police carried them away and kept them crowded together in small cells for hours. Shortly after their release they received a fine of 100,000 Ft each (US $425).

Fidesz compounded its problems when, during the incident, the party bigwigs decided to send Gabriella Selmeczi, the party spokeswoman, to Közgép to defend an allegedly private company. What an admission that Közgép may in fact be a Fidesz company! That was a big mistake.

LMP members of parliament and activists at Közgép

By now it is an open secret that the country is governed not only by Viktor Orbán but also by Lajos Simicska. Or at least this is what a lot of people claim. And the more this belief spreads the more difficult it will be to convince the population of the opposite. Especially when it was also revealed that despite the serious recession in the construction industry, Viktor Orbán’s father’s business, a stone quarry, is doing splendidly. Its chief business partner is Lajos Simicska’s Közgép!